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MACROECONOMICS.02

MACROECONOMICS.02. The Interdependence. of Everything. Commodity Prices: Running out of Everything. OIL: OPEC 1973 – 74 Gold: 1973 – 1980 Copper, zinc, nickel, etc: 1973 – 74 Anchovies: 1974. Anchovies?. El Ni ño Southern Oscillation: ENSO. Cold water off Peru => plenty anchovies.

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MACROECONOMICS.02

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  1. MACROECONOMICS.02 The Interdependence of Everything

  2. Commodity Prices:Running out of Everything • OIL: OPEC 1973 – 74 • Gold: 1973 – 1980 • Copper, zinc, nickel, etc: 1973 – 74 • Anchovies: 1974

  3. Anchovies? • El Niño Southern Oscillation: ENSO. • Cold water off Peru => plenty anchovies. • Warm water off Peru => dearth of anchovies. • Cold water off Peru => warm water off Indonesia & vice-versa. • So what?

  4. Cowboys Don’t Eat Anchovies • But cattle do, mixed in with their feed. • Anchovies => intense protein input. Great for red beef. • Anchovies scarce & expensive => substitutes (soybeans) used. • Now (1974) soybeans scarce & expensive.

  5. Asians Like Our Soybeans • US supply rises. • Carter imposes embargo. • Asians switch demand to less expensive palm oil. • US loses another export market. • Well, not totally & not for good.

  6. ENSO • Naturally occurring phenomenon. Irregular but never ending cycle. • Related to monsoon, typhoons, tropical storms, fish stocks, Peru’s GDP, other GDPs, price of meats & soybeans, etc.

  7. Hurricanes • Port of New Orleans (PONO) at the mouth of the Mississippi. • Largest port in USA, 4th largest in the world. • US Midwest agriculture exports flow out through PONO. • PONO not seriously damaged this time, but there will be next times.

  8. Katrina & Rita • Is there something like ENSO in the Caribbean & Gulf? • No, but there is plenty of warm water. • Is all this related to global warming?

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